TMI Blog2000 (3) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 8, 1997. We will refer to the terms of the agreement while considering the issues involved in the case. Suffice it to say that the deferral of sales tax was available only on the increased volume of production/sales. For the purpose of finding out the increased volume of production, the base figure was agreed to be the highest volume of production/sale in the petitioner's unit during the last three years. Accordingly, the highest production/sale was taken as 1041.27 metric tonnes and Rs. 822.61 lakhs being the figures available for the year 1995-96. In turn, the agreement entered into between the parties incorporated the following figures. Production in tonnes ... 1,041.27 M.Ts. Taxable sales turnover ... Rs. 473 lakhs Tax effect ... Rs. 59.14 lakhs Therefore, as per the agreement the petitioners have to go on paying the sales tax up to the level of base volume of production/ sales. In other words, up to the limit of Rs. 59.14 lakhs the petitioner has to pay sales tax and any further tax liability ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ek to sustain the correctness and validity of the notice dated September 9, 1999. 3.. In a separate counter-affidavit filed by the second respondent they also contend that the argument that it is enough to show that either of the two conditions, namely, base production volume or base volume is reached the petitioner will be entitled to deferral of sales tax, is not correct. They have not referred to the terms of the agreement since they are not parties to the agreement. They however, agree that as per clause 5.2 of the eligibility certificate an agreement has to be entered into with the Assistant Commissioner, Commercial Taxes. They also refer to G.O. Ms. No. 119/CT RE Department/dated April 13, 1994, wherein, the Government has clearly explained certain aspects of the eligibility for deferment of sales tax. Class (ii) of the said G.O. is as follows: (ii) When the actual production in the industry in any financial year exceeds the base production volume, the industry would be eligible for deferral of sales tax for sales made in that year in excess of the base sales volume under Tamil Nadu General Sales Tax Act, which is the highest of the actual annual sales in the last 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the taxable sales turnover and the tax effect which should be surpassed before the industry can avail of the sales tax deferral facility. We will therefore, refer to the terms of the eligibility certificate and the terms of the agreement to find out whether the petitioner can make good the case. Clause 5 of the eligibility certificate contains the conditions required to be specified. Clause 5.1 talks of the deferral period and the year of repayment. Clause 5.2 insists that an agreement should be entered into with the Assistant Commissioner of Commercial Taxes concerned, before availing the facility. Clause 5.3 is important and strong reliance is placed by the petitioner on this clause. We will therefore, extract the said clause and it is as follows: 5.3. The company is eligible for deferral of sales tax only on the increased volume of production/sale. For the purpose of determining the increased volume of production, the base figure would be the highest of the volume of production/sale in the company in any one of the year during the last 3 years. Till reaching the volume of production/sale specified earlier the company would be the highest of the volume of production/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate and says as follows: Till reaching the volume of production/sales specified earlier the company would continue to pay tax and any liability in excess of the production/sales specified above will be eligible for deferment. In view of the above facts, the base figure for finished product is furnished below: Year Production (Tonnes) TNGST ..... effect taxable turnover Tax effect CST ..... effect taxable turnover Tax effect Total taxable turnover Tax effect 1993-94 29.81 2.07 105.94 9.83 135.75 11.90 1994-95 71.47 5.14 187.38 14.56 258.85 19.70 1995-96 57.38 21.00 416.41 38.14 473.79 59.14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id T.N.G.S.T. 6.42 C.S.T. 0.33 Total Total 6.75 Since you have not reached the base production volume, you have to pay the amount availed, i.e., Rs. 11.18 lakhs. short payment 1997-98 Rs. 27.00 lakhs 1998-99 42.00 1999-2000 11.18 Total 80.18 9. We have therefore no difficulty in holding that the impugned notice dated September 9, 1999 is perfectly valid and in accordance with the eligibility certificate and the agreement between the parties. 10. An attempt was made to explain to us as to how the figure Rs. 822.61 lakhs was indicated as the base sale volume in clause 5.3 of the eligibility certificate. We are of the opinion that it is not a matter as to how the figure was arrived at so long as the clause specifically says that the petitioner has to pay tax till reaching the base sale value. It could only mean the tax liability on the total sale volume. We have al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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